Wealth Management

Wealth Management

Coral Gables Trust’s Investment Methodology

Coral Gables Trust employs a combined strategy using both active investments (institutional managers) as well as index-tracking investments (Exchange Traded Funds also referred to as “ETFs”) in the management of its clients’ portfolios. By blending active investments with index-tracked investments, we are able to optimize portfolios for risk, return and costs. This is a complex approach requiring experience and deep subject matter expertise, characteristics which well describe the firm’s Trust and Investment Committee (the “TIC”). The TIC is responsible for oversight as it relates to the establishment of the firm’s asset allocations, reviewing and monitoring exposure and risk, as well as tracking performance. To view Coral Gables Trust Members in the Trust and Investment Committee (the 'TIC"), please click here.

The Combined Active Management + Indexing Strategy

The combining of active and index investments offers our clients the potential to generate benchmark-beating performance with actively managed investments while creating an opportunity for enhanced risk management through index tracking and lower-cost index investments. Blending index and active investments further allows our clients’ portfolios to stay closer to their asset allocation model while creating an opportunity for significant outperformance. There are advantages and disadvantages to each style when considered separately. However, when combined with proficiency, the only disadvantages proven to exist are related to elevated time and effort associated with managing investment portfolios using this combined style. At Coral Gables Trust we have chosen to not let time and effort interfere with our ability to deliver exceptional, sophisticated investment and risk management.

Asset Allocation

The first and arguably most important step in portfolio construction is the development of the asset — allocation. A well-diversified asset allocation model attuned to investor’s wealth goals and risk tolerance is the foundation on which extraordinary investment management is built. The TIC has a strong track record of successfully developing, refining and managing the asset allocation process. By building a strong foundation that includes a breadth of investment solutions with unique risk/return profiles — investors can potentially achieve greater returns for given levels of risk.

Implementation and Risk Management

Once the asset allocation has been defined, the actual investments are then identified and these include both active managers and index investments.

In selecting investments during this process, we look for outstanding managers and we look to allocate to those managers in accordance with the asset allocation parameters. These top managers often require very large minimum investments in the seven figures and have high fees. Through CGT’s platform we can gain access to many of these managers at lower fee levels afforded only to “institutional clients” and with lower minimums thereby enabling our clients’ access to this universe of top managers they would otherwise not have. Monitoring also involves leveraging our access to the institutional managers with whom we have allocated capital.
 
Our size and the dollars allocated enable us to have ongoing communication that is essential for understanding the risk with our exposure. We then look to add index investments that complement the active managers, fill asset allocation voids and help leverage the benefits of the combined strategy styles for enhanced risk management. Understanding the impact of active risk is central to investment selection. By striking the right balance of index and active investments, active risk can be more effectively managed, improving the probability of investors achieving their goals and generating meaningful performance.

Monitoring, Rebalancing and Reporting

Once the asset allocation model has been implemented using a blend of index and active investments, the final and ongoing step is to monitor the performance of the portfolio. Combining index and active investments across asset classes provides a layer of flexibility when it comes time to rebalance the portfolio. For example, to stay close to your intended asset allocation, you can use index investments to adjust your exposure to different asset classes at a relatively low cost.  Index investments provide a flexible option to maintain your asset allocation when considering whether to add more to an under performing manager, or sell a manager who is outperforming the benchmark.

 

Fort Lauderdale

401 E. Las Olas Boulevard 
Suite 1400
Ft. Lauderdale, FL 33301
T 954.707.6899 F 954.400.5892
(Toll Free) 1.855.768.7878
 

West Palm Beach

500 South Australian Avenue
Suite 620
West Palm Beach, FL 33401
T 561.820.4844 F 561.300.8592
(Toll Free) 1.855.768.7878